By BankingMyWay.com Staff
When opening a new bank account, choosing the right bank for you is one of the most important things to think about. You have many options to choose from including brick-and-mortar banks, online-only banks, savings and loan institutions and credit unions. Here are some things to consider when choosing a bank.

Account Type

The type of account(s) you’re looking for may affect what kind of banking institution you should choose. If you are only interested in a high-yield saving account, for instance, you may want to concentrate your search on online-only institutions. These banks can offer higher interest rates because they do not have the same overhead as traditional brick-and-mortar banks.

Convenience

If easy access to your money is a priority, a local bank or a large bank with local branches may be the best choice. Nearby access to your bank can make it easier to handle deposits and withdrawals. Proximity isn’t the only factor, however. Look at what hours the bank branches are open and make sure they work with your schedule. Visit potential banks to see how well customer service is handled. Are there long lines at peak hours?

ATMs

If you make a lot of cash withdrawals, easy access to fee-free ATMs is a big plus. Not using a proprietary ATM can typically cost you a fee from your bank and a fee from the ATM operator. These fees vary, but combined, can cost $4 or more per transaction. Taking the time to choose a bank that offers proprietary ATMs near your home, work and other frequented areas can save you a lot of money.

Insurance

These days, Federal Deposit Insurance Corporation (FDIC) insurance, which protects your money up to $250,000 in the event of a bank failure, is more important than ever. Most banking institutions are FDIC-insured, but it’s still important to verify membership. The National Credit Union Administration (NCUA) provides the same protection for credit union members. However, even with FDIC or NCUA insurance, it’s best to choose a bank that is not in danger of failure.

Fees

Hefty bank fees can take you by surprise if you don’t do your research ahead of time. Some banks charge more fees than others to make up for small profit margins. Compare fees between similar accounts at potential banks. Some fees to look for include maintenance fees, ATM surcharges, overdraft fees, check printing fees, low-balance penalties, per-check fees and returned check fees. Most of these fees are unavoidable, but make sure any bank you choose has fees that are competitive with others. Also consider which fees may affect you the most. For example, if you write hundreds of checks per month, you can save money by choosing a checking account from a bank that permits unlimited check writing and offers free check printing.

Restrictions

Read the fine print on all bank accounts before you sign up. Some banks have numerous restrictions that can cost you money in fees or limit how you can use your account. For instance, is there a minimum balance requirement? Are you restricted to a certain number of transactions each month?

Once you choose a bank to open an account, you will probably not want to switch to another bank unless there are extreme circumstances. Take the time to investigate potential banks closely beforehand so that you can enjoy a long and happy banking relationship from day one.

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